Resources

Agenda

In the debate about the UK government’s green paper, Strengthening the incentive to save: a consultation on pensions tax relief, the emphasis has been on clamping down on tax breaks rather than helping low-to-moderate earners save for later life. This is a pity. A key motive for the pension reforms implemented since 2010 has been to prompt about 9m workers saving little or nothing for later life to start doing so.

One of our speakers, Tim Jones, headed (until recently) the government-backed fund set up to take in this mass of small savers, under the new “auto-enrolment” regime. Eventually 8% of each individual’s pay (above a modest threshold) will be squirrelled away. The carrot is that the average worker only need put in half of this, the employer and the government – via a tax rebate – will contribute the rest. Higher-rate taxpayers get a much more generous top-up, however, and account for most of the £34bn in income tax foregone by the government. Hence the calls for a “flat rate” of relief.

But the obsession with clawing back or equalising tax breaks ignores the tens of billions that have already been saved by cutting tax-free allowances and raising the state pension age. More could be done to rationalise both tax allowances, including exemptions form national insurance contributions, and pensioner-specific benefits.

The government is due to pronounce on incentives to save in next week’s Budget. So, this is one of your last chances to contribute to a rational debate about these difficult policy decisions. Leading the discussion, we are delighted to have:

Tim Jones, who ran Nest from 2010 to 2015. In previous phases of his career, he headed NatWest’s retail bank – oh yes, and was co-director of the CSFI. His latest baby is the digital currency, Tibado.

Daniela Silcock, head of policy research at the Pensions Policy Institute, where she has led on projects looking at automatic enrolment and state pension reform (among other things). Daniela has also served as a pension specialist at the House of Commons Work and Pensions Select Committee.

Michael Johnson, research fellow at the Centre for Policy Studies, for which he has written several pensions-related papers. Michael has championed pension ISAs as a radical way to simplify long-term saving – and to make serious savings for the Treasury.

Gemma Tetlow, who directs the IFS’s programme on pensions, savings and public finances. Gemma, who has a PhD in economics from University College London, was one of the leading contributors to the IFS's recently published Green Budget.